Embed Size (px)
DESCRIPTION
The lean management is doing more with less by employing “lean thinking.” It involves never ending efforts to eliminate or reduce wastes in design, manufacturing, distribution, and customer service processes. One of the key steps in Lean is the identification of which steps add value and which do not. By classifying all the process activities into these two categories it is then possible to start actions for improving the former and eliminating the latter. This paper aims to : • Adapt to marketing the wastes identified in the lean; • Propose some tools that can contribute to the reduction or the elimination of wastes present in the marketing strategies. • Measure the results of the application of these tools in the marketing strategies in a sample of 10 SME. Companies must be able to reduce the costs of marketing strategies to be more competitive in an increasingly dynamic market . Therefore it is a key factor to know the areas in which the activities are not value-added . The effectiveness of the tools presented has already been demonstrated in previous studies. The seven wastes in marketing context are: 1) Overproduction : documents, information, materials or functions of a product in excess. In fact, some goods have functionalities that are not required by the market. These functionalities have been a cost for the company but they are not value for the customer. 2) Inventory : Storage of goods in excess of the demand or lower than market expectations. The stock is the effect of incorrect distribution networks or unexpected variability of the market . 3) Waiting: Also known as queuing, waiting refers to the periods of inactivity in a downstream process that occur because an upstream activity does not deliver on time. The customer does not like to wait , so the company must deliver value quickly. Delays in delivery or delays in responding to customer demand cause loss of market. 4) Transportation: It includes any movement of goods that does not add any value to the product, such as moving materials between workstations or different areas in a point of sell. Improper design of the logistics network increases costs , environmental impact and the waiting time for the customer. 5) Over-Process: It is unintentionally doing more processing work than the customer requires in terms of product quality or features. If a process is not organized or managed properly than it is a waste. For example the incorrect management of the customer relationship cause the loss of market and customer dissatisfaction . 6) Motions : It includes any customer unnecessary physical motions or even unnecessary or difficult physical movements. It involves poor ergonomics or poor usability of product. 7) Defects : In addition to physical defects which directly add to the costs of goods sold, this may include incorrect delivery, or incorrect specifications.
Citation preview
Wastes and tools in the lean marketing strategy: an exploratory
study in the Italian SMEs
Andrea Payaro, Ph.D.
CEO of P&P Consulting & Services
In the proceedings of
2nd International Conference on Contemporary Marketing Issues(ICCMI 2014)
Andrea Payaro• 1999: Degree in Management Information System at University
of Padua• 2002: Ph.D. in Business Management at University of Padua• 2004: Post Doc. in Business Management at University of
Padua• 2004-2011: Visiting Professor at University of Padua• Today:
– Consultant certified by European Logistics Association– CEO of P&P Consulting & Services– Teacher of lean management at “Cattolica” University in Milan,
University of Verona and United Nations General Service Center in Brindisi.
– Marketing Researcher at Largo Consumo, Italian magazine of marketing and economics
• Author: Payaro, 2014. Help! How defend yourself from marketing and its strategies. Aras Ed.
ICCMI 2014Andrea Payaro 2
Agenda
• The lean philosophy: background and history• The wastes in the marketing context• The research• The cases study• Conclusions• New fields of research
Andrea Payaro 3ICCMI 2014
The lean
• What is Lean?– It is focused on eliminating waste in all processes– It is about expanding capacity by reducing costs– It is about understanding what is important to the
customer (e.g. value)– It is not about eliminating people
Andrea Payaro 4ICCMI 2014
Lean Thinking
• The 5 principles of lean (Womack and Jones, 1996) :– Specify value from the perspective of the
customer– Identify the value stream to expose waste– Create flow to reduce the costs– Make only what the customer want– Seek perfection by continuously improving quality
and eliminating waste
Andrea Payaro 5ICCMI 2014
Profitability
Marketing is a social & managerial process by which individuals & groups obtain what they need & want through creating, offering & exchanging products of value with others (Kotler, 2002).
• In other words, the lean philosophy aim to give to the customer products or services of value, that is what the customer want.
• The company must improve quality, reduce costs and increase its profitability.
Andrea Payaro ICCMI 2014 6
it sounds familiar !
The History
• 1574: King Henry III watches the Venice Arsenal produce finished galley ships using continuous flow processes
• 1799: Eli Whitney perfects the concept of interchangeable parts
• 1902: Sakichi Toyoda establishes the jidoka concept
• 1910: Henry Ford moves into Highland Park, the “birthplace of lean manufacturing” with continuous flow of parts
• 1938: Just-In-Time concept established at Toyota
Venetian Galley
Toyoda Automatic LoomAndrea Payaro 7ICCMI 2014
The History
• 1975: First English translations of TPS are drafted
• 1990: Womack and Jones publish The Machine That Changed the World, becoming the definitive text creating the term “lean”, followed by Lean Thinking in 1996
B-24 Bomber
Toyota AA
• 1940: Consolidated Aircraft builds one B-24 bomber per day, later improves production to one B-24 per hour
• 1949: Taiichi Ohno promoted to shop manager at Toyota, develops “elimination of waste” concept
Andrea Payaro 8ICCMI 2014
The wastes
• Waste: Anything that does not add value to a process and that which a customer would not want to pay for, if given a choice (Ohno, 1988).
• 8 Forms of Waste– D efects or rework– O verproduction– W aiting– N on-utilization of talent– T ransportation or travel– I nventory– M otion– E xtraProcessing
Andrea Payaro 9ICCMI 2014
Bibliography
Manufacturing
NPDSCM & Logistics
Accounting
Marketing
?Andrea Payaro 10ICCMI 2014
Not a scientific proof
Lean Management: 6,169 results
Lean Manufacturing: 4,628 results
Lean Marketing: 716 results
Andrea Payaro 11ICCMI 2014
Lean marketing?
• Some issues:– The Ohno’s model is valid in marketing context?– Do they exist any tools to reduce or eliminate the
wastes?– Can we use the relationship between wastes and
tools to reduce the time to developing a new strategy?
Andrea Payaro 12ICCMI 2014
Wastes in MarketingMuda by Ohno Wastes in marketing Example of ToolsOver-production Information, materials or functions that
exceed what is actually needed. Quality Function Deployment
Inventory No or incorrect demand forecasting. Excess unsold products or stockouts.
Just In Time, Demand Planning
Waiting Service provision or distribution times exceed what the customer requires. Response times are longer than customer expectations.
Value Stream Mapping
Extra-processing
Complex procedures in delivering value to customers. Customers perceive much lower value than is actually supplied by the company.
Makigami Process Mapping
Transportation Logistics systems - from raw materials management, to production, distribution and sale - are poorly integrated and inefficient
Collaborative Planning Forecasting Replenishment; Milk Run; Vendor Managed Inventory; Consignment Stock.
Motion Products or services have low levels of usability and accessibility
Design For Usability; Design for Manufacturing and Assembly
Defects Defects in products or service provision that create high costs of non-quality
Failure Mode Effect Analysis; Fishbone Analysis; 5Ws
Andrea Payaro 13ICCMI 2014
The research
• The sample is composed by 10 Italian SMEs (Over than 99 % of north east Italian companies are SMEs)
• All the enterprises belong to different industries.
• The companies were selected on a voluntary basis.
• At moment, we are using the proposed model in the 10 companies
Andrea Payaro 14ICCMI 2014
The PDCA
• Plan) Semi-structured interviews with Chief Executive Officers (CEOs), sale force, R&D, and customer service aim to identify the main wastes
• Do) Tools identification, presentation to company’s functions and application
• Check) Two months after the start of the project, we control the results through interviews with Chief Executive Officers (CEOs), sale force, R&D, and customer service;
• Act ) Process standardization and extension of the solution to other areas of the company.
Andrea Payaro 15ICCMI 2014
The cases
# Company Wastes Tools Main Results
1
Manufacture and sale of construction and mining equipment, utilities, forest machines and industrial machinery
Waiting, Over-processing
Makigami e Value stream Analysis
Reduction of time of delivery of the finished goods to the customer from 15 to 11 days. Increased level of customer satisfaction. Increase inventory control and reduction of WIP.
2Manufacture of brazing alloys and brazing fluxes
Over-processing Makigami Delivery within 24 hours of your order for a selected number of items. Increased level of customer satisfaction.
3
Auto dealer (the biggest in the north east area)
Waiting, Over-processing
Makigami e value stream analysis
Reduction of the number of vehicles deposited in a pivot parking with a consequent reduction of costs. Reduction of time of delivery to the customer from 2 to 1 week through a review of the sales processes.
4Design and manufacture of Wood stoves, fires and pellet stoves
Over-production Quality Function Deployment
Revision of projects and development of a new product able to meet the needs of the customer. Registration of a new patent.
5
Design and manufacture of industrial humidification and ambient air control systems.
Defects Failure Mode Effect Analysis, Fishbone Analysis
Reduction of the number of defects; Reduction of time of maintenance of components.
Andrea Payaro 16ICCMI 2014
The cases
# Company Wastes Tools Main Results
6
Production of air conditioning plants for large spaces.
Inventory Consignment Stock, Milk run system
Reduction on delivery time from 25 to 22 days. Reduction of Stock outs. Reduction of defect rates.
7
Production of fillings and parts made of flexible and integral polyurethane, and PVC, chairs. Automotive spare parts.
Transportations, Inventory
Collaborative Planning Forecasting and Replenishment
Increased goods quality, reduction of WIP, increased control of inventory.
8Fastening systems Transportations,
Inventory Consignment stock Increased customer satisfaction; New service
developed for customers.
9Production of chain and belt conveyor systems.
Waiting, Over-processing
Makigami Reduction of time from the request for quotation to quotation.
10
Complete plants for bricks and roofing tiles with particular focus on preparation, storage and extrusion equipments.
Motion, Defects Design For Manufacturing and Assembly
Reduction of components per product; Modularization of product; Reduction of cycle time. Reduction of defects in finished goods
Andrea Payaro 17ICCMI 2014
Cases and tools
Value Stream Mapping is used to identify the Waitings
Makigami helps us to discover the over-processing from order to delivery.
Andrea Payaro 18ICCMI 2014
Cases and tools
The QFD is a useful tool to identify some functions that exceed what is actually needed.
Andrea Payaro 19ICCMI 2014
Cases and tools
With the DFMA we reduce the number of fastener systems and the material wasted during a process of extrusion
Analysis of the flow of the vehicle from the order to the delivery.Reduction of time of delivery to the customer from 2 to 1 week through a review of the sales processes.
Andrea Payaro 20ICCMI 2014
Conclusions
• Ohno’s classification of wastes should be valid in marketing context. • The companies involved in the project have a positive verdict on the
model. They say :– The model helps to identify more quickly which tools use to improve
the level of customer satisfaction;– The model presents some tools that the company did not know;– The model increases the level of knowledge of customers;– The model increases the level of customer satisfaction;– The model has a positive effect on other business functions such as
warehouse and R & D.• All ten SMEs are using this classification to identify the wastes in
their marketing strategies. • The main results are an increasing customer satisfaction, the
standardization of processes and the reduction of process cycle time.
Andrea Payaro 21ICCMI 2014
New fields of research
• The model should be improved by a better contextualization on marketing
• The tools presented are not exhaustive because other tools can be useful to reduce some type of wastes.
• We need a set of tools to apply exhaustively the lean marketing.
Andrea Payaro 22ICCMI 2014
Work in Progress
• How should we measure the lean improvements?
• In collaboration with the Italian Association of Logistics and Supply Chain Management (AILOG) a teamwork is analyzing a model to identify 10 KPIs.
• The indicators must be valid for different industries.• Some companies involved: Iveco, Komatsu, Epta
Refrigeration, Campari, Swegon, Umicore, etc.• The model will be ready at the end of 2014.
Andrea Payaro ICCMI 2014 23
Thanks for your attention!
Today we live the choices made in the past. Now we can choose how to live in the future.
.
Andrea PayaroAndrea [email protected]@payaro.it
ICCMI 2014Andrea Payaro 24
